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Keywords:credit cards 

Working Paper
Which Lenders Are More Likely to Reach Out to Underserved Consumers: Banks versus Fintechs versus Other Nonbanks?

There has been a great deal of interest recently in understanding the potential role of fintech firms in expanding credit access to the underbanked and credit-constrained consumers. We explore the supply side of fintech credit, focusing on unsecured personal loans and mortgage loans. We investigate whether fintech firms are more likely than other lenders to reach out to “underserved consumers,” such as minorities; those with low income, low credit scores, or thin credit histories; or those who have a history of being denied for credit. Using a rich data set of credit offers from Mintel, ...
Working Papers , Paper 21-17

Working Paper
The Credit Card Act and Consumer Debt Structure

We investigate whether the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 influenced the debt structure of consumers. By debt structure, we mean the proportion of total available credit from credit cards for each consumer.The act enhances disclosures of contractual and related information and restricts card issuers’ ability to raise interest rates or charge late or over-limit fees, primarily affecting non-prime borrowers. Using the credit history via the Federal Reserve Bank of New York/Equifax Consumer Credit Panel during 2006–2016, we find that the average ...
Working Papers , Paper 20-32

Working Paper
Distributional Effects of Payment Card Pricing and Merchant Cost Pass-through in the United States and Canada

Using data from the United States and Canada, we quantify consumers’ net pecuniary cost of using cash, credit cards, and debit cards for purchases across income cohorts. The net cost includes fees paid to financial institutions, rewards received from credit or debit card issuers, and the merchant cost of accepting payments that is passed on to consumers as higher retail prices. Even though credit cards are more expensive for merchants to accept compared with other payment methods, merchants typically do not differentiate prices at checkout, but instead pass through their costs to all ...
Working Papers , Paper 20-13

Newsletter
How Similar Are Credit Scores Across Generations?

With the rise in economic inequality in the United States in recent decades, there has been growing concern about whether there is a sufficient degree of equality of opportunity in our society. Policymakers and researchers alike often focus on studies of intergenerational mobility as a way of assessing opportunity. These studies typically analyze distinct aspects of socioeconomic status, such as income, education, occupational status, and health, and measure the association in these outcomes between parents and their adult children.1 If the association (level of similarity) is very high, then ...
Chicago Fed Letter

Report
The 2015 Survey of Consumer Payment Choice: summary results

The 2015 Survey of Consumer Payment Choice (SCPC) was implemented using a new longitudinal panel, the Understanding America Study (UAS), and results are not yet comparable to the 2008?2014 SCPC. In 2015, U.S. consumers made 68.9 payments per month. Debit cards remained the most popular payment instrument among U.S. consumers in 2015, accounting for 32.5 percent of their monthly payments, followed by cash (27.1 percent) and credit or charge cards (21.3 percent). For nonbills, consumers used cash and debit equally?about one-third of the time for each. For bills, consumers used payment cards for ...
Research Data Report , Paper 17-3

Report
The 2014 survey of consumer payment choice: summary results

In 2014, the average number of U.S. consumer payments per consumer per month decreased to 66.1, in a statistically insignificant decline from 67.9 in 2013. The number of payments made by paper check continued to decline, falling by 0.7 to 5.0 checks per month, while the number of electronic payments (online banking bill payments, bank account number payments, and deductions from income) increased by 0.6 to 6.9 of these payments per month. The monthly shares of debit cards (31.1 percent), cash (25.6 percent), and credit cards (23.3 percent) continued to be largest; while the share of ...
Research Data Report , Paper 16-3

Working Paper
Credit card utilization and consumption over the life cycle and business cycle

The revolving credit available to consumers changes substantially over the business cycle, life cycle, and for individuals. We show that debt changes at the same time as credit, so credit utilization is remarkably stable. From ages 20?40, for example, credit card limits grow by more than 700 percent, and yet utilization holds steadily at around 50 percent. We estimate a structural model of life-cycle consumption and credit use in which credit cards can be used for payments, precautionary smoothing, and life-cycle smoothing, uniting their monetary and revolving credit functions. Our estimates ...
Working Papers , Paper 17-14

Discussion Paper
Just Released: More Credit Cards, Higher Limits, and . . . an Uptick in Delinquency

Today the New York Fed’s Center for Microeconomic Data released its Quarterly Report on Household Debt and Credit for the second quarter of 2017. Overall debt balances increased in the period, continuing their moderate growth since 2013. Nearly all types of balances grew, with mortgages and auto loans rising by $64 billion and $23 billion, respectively. Credit card balances increased by $20 billion, recovering from the typical seasonal first-quarter decline. The overall balance surpassed its previous peak in the first quarter. We wrote here about how the new peak poses little concern in and ...
Liberty Street Economics , Paper 20170815

Working Paper
The economics of debt collection: enforcement of consumer credit contracts

In the U.S., third-party debt collection agencies employ more than 140,000 people and recover more than $50 billion each year, mostly from consumers. Informational, legal, and other factors suggest that original creditors should have an advantage in collecting debts owed to them. Then, why does the debt collection industry exist and why is it so large? Explanations based on economies of scale or specialization cannot address many of the observed stylized facts. The authors develop an application of common agency theory that better explains those facts. The model explains how reliance on an ...
Working Papers , Paper 14-7

Discussion Paper
What Explains the Post–2011 Trends of Longer Maturities and Rising Default Rates on Auto Loans?

This paper quantifies relationships of long-term auto borrowing and auto-loan default to observable borrower characteristics and economic variables. We also quantify the residual components of the trends in long-term borrowing and delinquency not attributable to identifiable factors. Second, our paper provides new evidence on the relationship between longer-term borrowing and auto-loan default risk. We find that observable factors associated with the choice of a long loan term usually indicate an increased risk of default. We also find that the increasing share of long-term loans and the ...
Consumer Finance Institute discussion papers , Paper 20-02

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